Business 0450 · IGCSE · Cash-flow forecasting and working capital
Cash-flow forecasting and working capital — practice question
IDT is a multinational business that makes clothes for the mass market, and it has factories in 4 countries. Its finance needs are both short-term and long-term. The Finance Director is examining IDT’s statement of financial position, with an extract shown in Table 3.1. He has been asked to work out working capital and to describe how a rise in non-current liabilities could influence IDT.
(a)[2]
Define the term ‘mass market’.
(b)[2]
Calculate IDT’s working capital in 2023.
Working:
Final answer:
(c)[4]
Outline one reason IDT might need each of the following types of finance:
Short-term finance:
Long-term finance:
(d)[6]
Explain two ways an increase in non-current liabilities could affect IDT.
Way 1:
Explanation:
Way 2:
Explanation:
(e)[6]
Explain two advantages that a business gains from being a multinational company. Which advantage do you think is likely to be the most important? Justify your answer.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “A product sold in very large numbers” …